Successful strategy starts with the question, ‘What does the client need and how does that drive what we offer as a business?’ That’s the client centric approach.”

COO, Global Wealth Management firm

The Trusted Advisor: RIP

Is it time to drop a tired phrase from your Client Strategy?It’s the phrase found most often on the lips of the professional advisor. It appears in almost all the marketing collateral and websites of the best known private banks and wealth management firms. But is it time to challenge this shibboleth?

James Edsberg of Gulland Padfield, the specialist consultancy to wealth management firms suggests it might be time to wave goodbye to an old friend and embrace a new set of client-centric messages which resonate better with HNWs and UHNWs.

Recent media attention surrounding several of the major global Private Banks combined with the impact of the 2008-2012 downturn has highlighted the fundamental change in the relationship between advisors and their private clients. It’s a shift which has prompted many firms to scrutinise how they design and implement their Client Strategy and, specifically, the language they use to position their brands in a competitive market.

For years, the phrase ‘the Trusted Advisor’ has been the most commonly-used term in the wealth industry to describe the ideal advisor-client relationship. There’s plenty to indicate that now is a good time to question whether the ‘Trusted Advisor’ label best encapsulates what private banks and wealth managers do and should aim for with their clients.

Why? Because we’re in an era where service delivery is questioned, where procurement processes are now integral, where competitive pitches are a feature and pricing pressures persist; an era where clients ask for transparency and metrics and where many clients and families are advised not by a single individual or institution, but by a panel of advisors.

If your institution is considering how to define its market message and brand more clearly, here are 10 reasons why your firm should debate the continuing value of a dated mantra.

10 thoughts to encourage a debate about the continuing use of this mantra by your firm1. Why lead with your weakest card?After 2008, there was a widespread collapse in clients’ faith and confidence in many financial brands. Although reputations have improved that perception still lingers. Trust is a vital prerequisite to run any business but research among buyers of financial services consistently shows that clients remain extremely sceptical about assertions from any advisors about their trustworthiness. Is it the best message for you to lead with?

2. It’s not what clients look for when selecting an advisor.Wealth management clients fully expect advice to be ethically given, confidences respected and data protected. However what they really consider on selection is a range of other factors. These include the quality of the firms’ market insights and its performance record. Increasingly, it’s also the non-financial aspects of the service experience that count for more such as clear communications and regular reporting. By continuing to give prominence to ‘the Trusted Advisor’ phrase, you are talking up what marketers call a ‘hygiene’ factor not a differentiator that today’s HNWs value when selecting an advisor.

3. More trust doesn’t translate into more share of HNW wallet.The causal link between Trust and growth in AUM is neither smooth nor linear. It’s a step which then plateaus. Yes, without Trust, no one would use your services at all. But with it, there’s no guarantee that people will. It’s possible for a client to trust you completely as an advisor but not use your own services at all or much. In today’s market, a stronger perception of Trust won’t, on its own, translate into higher revenues for your firm.

4. It’s difficult for your staff to action.Be trustworthy or Inspire trust are just two examples of the internal values messages given to staff recently by leading private banks and wealth management firms. In our experience, very few private banks and wealth managers that use Trust as a brand message or value go beyond the compliance requirements to define what their people should do or shouldn't do to demonstrate it to clients. Lack of definition is a critical weakness of many values-based internal branding initiatives.

5. It’s difficult to measure.For a message that is at the centre of so many banking brands, many institutions never know or ask whether they have achieved it. As a metric or a KPI, it’s difficult to measure progress and therefore impact. It’s a binary measure; there is no spectrum on Trust. You either have it or you don’t. People talk about ‘building trust’ but they usually mean ‘building a relationship’ because you don’t even start building a relationship with an advisor you don’t trust.

6. It’s a message for the truly personal service not today’s wealth management advice.It’s one of the most consistently-held misconceptions in the private banking space that HNWs and UHNWs tend to stay with the same relationship manager even when that RM leaves an institution. Some clients do, but by and large the loyalty between clients and the institutions is stronger than the tie between clients and an individual advisor. As HNW needs grow more complex, the most valuable client relationships in private banking are managed by teams not individuals. They are becoming institutional rather than personal. So, using the ‘Trusted Advisor’ phrase which implies a high degree of individual personalisation, is out of step with how advice is actually given. If you really are an independent professional advisor, a sole trader, a doctor or a therapist, the ‘Trusted Advisor’ message might be for you. If you are anything larger, it probably isn’t.

7. It’s reducing your ROI on technology.Technology is delivering a better service experience for clients. One that they can tailor at the touch of their tablet. One which, hopefully, they will value more. This investment in technology across private banking and wealth management services is however changing the interaction with the advisor – an interaction that used to be exclusively ‘human’. Building a brand around the ‘Trusted Advisor’ indicates a promise for personal interaction that threatens to cannibalise or overshadow the benefits to potential clients from your investment in technology.

8. It doesn’t work in a pitch‘Trust us’. For the prospective client, it’s asking them to leap into the dark with you. It’s a phrase which is as difficult to assess in the business environment as it can be in our personal friendships and day to day life. Why would a prospective client feel that they have to make that jump of faith? It’s for the advisor to show what and how it will add value to the client.

9. It’s out of step with how HNWS retain advice.Clients rarely give all their assets to one private bank or wealth manager to manage. Wealthy individuals are more multi-banked than before. So, while advisors want to maintain or establish relationships, clients in some geographies are increasingly promiscuous and transactional about the service providers they work with. Positioning yourself using the ‘Trusted Advisor’ tag, implies that you are exclusive adviser which often isn’t the case and isn’t how wealth individuals like to take advice.

10. It’s undifferentiated and tired.Take 2 minutes of your day to look at the websites of the world’s leading private banks and wealth managers – even family offices. Declarations of trust and integrity are not likely to make your organisation stand out. As a phrase, it is dated. And for many clients, elicits rolled eyes when they hear it. It’s self-regarding and one of the least client centric phrases in the marcoms armoury.

To find out how to create a compelling and differentiated Client Strategy, contact:James Edsbergjedsberg@gullandpadfield.com +442030512295

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